Car loan as a security – solid car financeUncategorized
A car loan as a security is not only interesting when a car is to be purchased.
It can also be put into action if another earmarked loan or a non-purposive loan is on the wish list. The only important thing is that the vehicle is also suitable as security.
Why the car as security?
Lending is only possible if it is well secured. Depending on the loan amount and the type of loan, it is sometimes not enough for the borrower to have a good credit rating. Especially with large loan amounts additional collateral must be raised, which are tangible for the bank in the event of a fall. And that would be a vehicle, for example.
The same applies if the creditworthiness of the borrower is generally weak. Then, various collateral must also be named, which need not necessarily be in the form of a guarantor or a second borrower. A car loan as collateral would therefore come into question in such a case.
The classic in a car loan as collateral is still the earmarked car loan. Here, the vehicle is generally regarded as security and the bank or dealership retains a part of the vehicle registration. This ensures that no sales during the repayment is sought and the security is eliminated.
What is the value of the vehicle?
A key question on the road to a car loan as collateral is always: what value does the vehicle have and is this value sufficient for the vehicle to be safe?
In a pure car loan that would be the case. Because the loan amount represents the value of the vehicle. In addition, the vehicle loses value over the years. Similar to the loan, whose loan amount is being reduced further and further. So far, until all liabilities are paid off.
If it is not a car loan, the value of the vehicle must be determined in advance. This can be done via a report. It would also be possible to ask a dealer or another expert about it. The bank then checks whether the value of the vehicle is sufficient for taking out a car loan as collateral.
Again, a part of the vehicle registration must be deposited with the bank. The vehicle may therefore not be sold during the repayment of the loan.
Credit with car as security – admission
Appropriate loan offers for a car loan as collateral can be found in many places. It is therefore important to find the loan that best suits the borrower and his plans from the wide range of offers.
Our loan calculator can help with this decision. He compares different loan offers with each other, which can then be used at will. The use of the computer is free and without obligation. On request, a direct application for the loan can also be made.
The completed loan application must also include all the documents necessary for assessing creditworthiness. In addition, the documents for the vehicle, which prove its value. Only when everything has been checked and approved, the credit agreement can be signed.